Anglo American’s Restructuring

8:00 am ESTDec 8, 2015

By

Michael Amon

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Anglo American PLC said Tuesday that it would restructure in one of the most dramatic moves yet taken by a mining company trying to weather a prolonged downturn in the prices of commodities like iron ore and copper. Here are the highlights.

Job Cuts

85,000

Anglo said it would cut its workforce to 92,000 employees by 2017 from 135,000 now. The company had already cut 27,000 jobs since 2013 when the rout in the prices of several metals began. Ultimately, the company said it wants a workforce of 50,000 people, though it didn’t give a timeframe for getting there.

Dividend Cut

About $1 billion

Anglo said it would cut its dividend as part of its plan to get spending in line with costs. The company currently distributes about $1 billion in dividends to investors a year.

Asset Reductions

Up to 35 mines

Anglo said it would get rid of up to 35 mines, reducing its portfolio to about 20 at an unspecified date from the current 55. In the more immediate future, the company said it would sell or close 19 mines. The moves would allow Anglo to focus on what it calls “priority 1 assets”–mines that produce commodities at low enough prices to make money during a downturn.

Consolidating Divisions

3

Anglo said it would now have three businesses focused on diamonds, industrial metals like copper, and bulk commodities like coal and iron ore, down from six. The company plans to sell its phosphate and niobium mines. It said it would increase its target for asset sales to $4 billion.

Spending cuts

$2.9 billion

Anglo said it would increase its capital spending reductions by $1 billion, so that by 2017, it would be $2.5 billion less than in 2014. The company is also consolidating its corporate offices to save money.